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High Demand Means High Priced Oil in 2012

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With crude oil demand predicted to increase by over a million barrels per day in 2012, how will the oil industry keep up with this rapidly growing need? How much more will companies need to produce? This raises a lot of questions. Paul Ausick has broken down some numbers to explain what exactly needs to happen in order to reach this growing need for crude oil.

"For 2012, OPEC forecasts supply from non-OPEC producers will increase by 680,000 barrels/day to a total of 53.57 million barrels/day. The cartel notes that this level of production is “associated with a very high level of risk” due to political concerns and technological advances.

On its own behalf, OPEC produced 29.60 million barrels/day of crude oil in June. The cartel expects to average 5.29 million barrels/day in non-conventional oils and natural gas liquids, rising to 5.65 million barrels/day in 2012.

Total supply in June, according to OPEC, averaged 87.82 million barrels/day. The IEA estimate for total oil demand in 2012 is 91 million barrels/day.

There is not a chance that crude production will make up the nearly 3.2 million barrel/day increase in demand. If there is any good news in all these numbers it is that OPEC was able to increase production in June by about 500,000 barrels/day."